Shops that have been hit by a slide in profits often improve their sales quickly after a revamp of their outlets or a change of management and marketing strategy.
In 1999, for example, Arcadia, which owns Top Shop, Burton and Dorothy Perkins, was struggling and its share price was languishing at 50p.
But when Philip Green, the retail entrepreneur currently stalking Marks & Spencer, took over in 2002, its shares soared and it was eventually bought out at more than 400p a share.
Mothercare, the baby-clothes chain, has also staged a dramatic recovery. In 2001, its profits started to tumble because of distribution problems. By early 2003, the shares had slumped to less than 100p.
But the chain’s recovery took a matter of months. The problems were sorted out, stores were revamped and profits rolled in again. Investors who bought in early 2003 have trebled their money as the stock has soared to more than 300p.
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I think I have found another firm that may be on the brink of recovery — Brown and Jackson. The retailer has recently been hit by profit warnings, and its shares, which cost more than 150p in October, crashed to just over 50p last month.
The company has suffered stock problems at its Poundstretcher stores and poor Christmas trading resulted in heavy falls in the share price.
But it seems to have turned a corner. The company has raised more than £25m from a rights issue and will use about £14.5m of this to convert its Poundstretcher stores to a new format.
I bought 5,000 shares at 60.69p on June 4. I believe that they could easily rise to more than 100p by the autumn.
I sold my holding in the Exeter Selective Assets investment trust on June 14. I bought 10,000 shares for 23.95p in March, and I sold at 23.5p for a small loss of £45. The value of the trust had not been moving much, so I decided it would be better to invest elsewhere.
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It has been an excellent fortnight for my self-invested personal pension (Sipp). In particular, Burren Energy, the oil company, has soared from my buy price of 239Åp in April to 281p. It could go even higher — the firm was promoted to the FTSE 250 index on Friday, which should mean more buyers for the shares.
One of my long-term holds, Telecom Plus, the utility company, announced a decent set of figures last week. Profits have risen 90%, and customers for its telephone, internet, and energy services have risen by 33%.
I bought the shares for 219p in July last year. They are now 300p, and I have made a profit of £1,804. I intend to keep them for a long time yet.
After a few weeks of decline, the value of my Sipp has shot up this fortnight by £762, or almost 3%. I have made £28,074 since I started the fund 21 months ago.
I’ll be back in two weeks with another update.